AG. Yemi Osinbajo Signs Law Allowing Nigerians To Use Cars as Collateral

AG. Yemi Osinbajo Signs Law Allowing Nigerians To Use Cars as Collateral

Acting President Yemi Osinbajo on Tuesday signed the Secured Transactions in Movable Assets Act otherwise known as the Collateral Registry Act into law.

The law allows small and medium enterprise owners register and use their movable assets such as cars as collateral.

The Collateral Registry Act is expected to pave the way for quicker access to credit for business owners who may otherwise be unable to meet stringent loan conditions imposed by banks.

Before now, the policy had operated as a guideline issued by the Central Bank of Nigeria (CBN) which created the National Collateral Registry to oversee the grant of loans with movable assets as collateral.

2/ The signed Bills are the Secured Transactions in Movable Assets Act, 2017 (Collateral Registry Act) and the Credit Reporting Act, 2017.

— Presidency Nigeria (@NGRPresident) May 30, 2017

A second bill signed into law by the acting president on Tuesday was the Credit Reporting Act which provides a framework allowing lenders to exercise reasonable judgment in extending credit to individuals.

It is expected that the Credit Reporting Act will help tackle the challenge of bad loans or perpetually unpaid debts often causing the distress of financial institutions.